Of all the things we might do to improve our health care system, the one reform that is more important than any other is almost never discussed.
It is ignored by Republicans. By Democrats. By the experts. By the think tanks. And by just about everybody who has an opinion on health policy.
Here it is: If we want the system to work well, we must make it profitable to take care of sick people.
Instead of debating how to expand Medicare coverage, politicians should focus on fixing the fatal financial flaws in the existing program that threaten to bankrupt the nation.
Medicare spent 3.6% of gross domestic product in 2016, more than six times the share it consumed in 1967, the first full year it was implemented. The forecasts I have analyzed show that the share of GDP will rise to at least 9% within 75 years—and that’s the good-news scenario. Other plausible forecasts show that Medicare could spend more than twice that.
Two efforts are underway in the Senate to compile bipartisan packages aimed at lowering and bringing transparency to health care costs, with the goal of merging them on the Senate floor this summer:
- Senate Finance Committee Chairman Chuck Grassley (R-IA) and his Democrat counterpart, Ron Wyden (D-OR), are poised to release a drug pricing proposal by the end of the month.
- The other top health care committee — Health, Education, Labor and Pensions — is preparing for a hearing on a health care pricing package recently released by its leaders, Chairman Lamar Alexander R-TN) and Patty Murray (D-WA).
Neither package will include one singular big thing to lower health care costs for consumers. Instead, they’ll be full of smaller proposals that legislators say together could help move the needle on prices.
Medicare Advantage (MA) and Part D applications were up 87% during the open enrollment period between January and March compared to the same period last year, according to a new report from eHealth.
The report looks at the costs and reactions from enrollees of Medicare’s latest open enrollment period. During the first three months of this year, the average MA premium dropped 33% from $12 to $8 from 2018, and average out-of-pocket limits decreased 11%. The average monthly premium for Part D coverage decreased during this time as well from $26 to $25.
| One solution to most instances of surprise billing is to simply eliminate the possibility of being treated by an out-of-network emergency, ancillary, or similar clinician at an in-network facility. There are multiple ways to accomplish this, but one approach—sometimes called “network matching” or an “in-network guarantee”—would require these facility-based clinicians to contract with every health plan that the facility at which they practice accepts or, alternatively, choose to secure payment from the hospital rather than insurers. That requirement can be imposed either directly or, alternatively, indirectly by making joining an insurer’s network the only way clinicians can secure payment. |
Just as choice and competition make products and services less expensive in the rest of the economy, they can do so in health care. We must substantially expand Americans’ freedom to choose their own health insurance—both in public and private programs. We should gradually convert the Medicaid program from its current single-payer form into one in which enrollees receive tax credits to buy private insurance. And we should strengthen Medicare Advantage, the market-based form of Medicare whose consumer-driven structure has incentivized insurers to offer broader benefits, lower out-of-pocket costs, and better health outcomes than traditional Medicare does.
Health care advances have delivered great benefits to society, bringing material improvements in average life spans and quality of life. Yet these improvements have come at a cost—an ever-expanding portion of the US GDP is being consumed by healthcare expenses. Could technology be part of the solution by enabling delivery of healthcare advances while improving affordability? We have reviewed the evidence, done the math, and identified technology-enabled use cases that could create between $350 billion and $410 billion in annual value by 2025 (out of the $5.34 trillion in healthcare spending projected for that year).
In a year already marked by a wide variety of congressional health care legislation, Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., on Thursday released the details of a plan they hope will help bring down health costs and eliminate surprise medical bills for patients. Alexander and Murray are the chair and ranking member, respectively, of the Health, Education, Labor and Pensions Committee.
“These are common-sense steps we can take, and every single one of them has the objective of reducing the health care costs that you pay for out of your own pocket,” Alexander said in a statement. “We hope to move it through the health committee in June, put it on the Senate floor in July and make it law.”
The Trump administration has been working behind the scenes for months on a strategy to force greater price disclosure across much of the $3.5 trillion health-care industry. The push relies on existing administrative tools, according to people familiar with the discussions. Those include Labor Department powers under the law setting minimum standards for private-industry health plans and current hospital-payment rules under Medicare. The administration is strongly interested in forcing insurers to publicize the negotiated rates they pay for services, the people said. The requirement could affect insurers providing coverage in the private-employer market.
| Newly released Senate legislation to curb surprise medical bills would allow third parties to settle billing disputes, a provision that could complicate passage because it is opposed by the White House and absent from a House draft. The Senate bill represents nearly a year of work led by Sens. Bill Cassidy (R-LA) and Maggie Hassan (D-NH). The Senate bill would have insurers pay out-of-network doctors and hospitals for the difference between a patient’s in-network cost-sharing requirements and the median in-network rate for their services. If either party wanted to appeal the amount, they could do so using an arbitration process. [AEI’s Jim Capretta explains at RealClearPolicy why arbitration is not a good idea.] |